The Role of Technology in Attaining Competitive Advantage - Article Example

The Role of Technology in Attaining Competitive Advantage Name Date Article review and analysis Author's purpose for writing the article The article seeks to analyze the relationship that information technology has with the competitive advantage. From the article to note that, information technology improves competitive advantage as long as it acts with management. Michael Porter in the article urges that internet it’s an emerging new kind of technology and without any surprise it has been welcomed by several stakeholders especially entrepreneurs, and even in various homestead. Porter also believed that many individuals tend to rely on internet on every day to day activities in the believe that it changes everything within their entire life. From the article Michael, porter clear indicates that strategy of introducing democratic ownership structure so that it impacts on competitive advantage. Firms are developing information technology to a greater extent (Porter, 2001). Manufacturing companies employ advanced manufacturing technology and they are more flexible compared to their competitors in the same industry, Michael Porter in his article urges that organizations in various sectors have marked success in their operations due to the use of modern technology. Porter from the article also strongly believes that most of Organizations are slowly investing their time and capital in information technology and its effects. In that, organizations are using technology for competitive advantage for their rivals or competitors. Porters article hence strongly emphasis on aims at helping managers to respond appropriately to the challenges of this information technology revolution. Information technology plays an important role in attaining competitive advantage for organizations Porter (2001). The article also analyzes the effects of the various actions that organizations take in a bid to have a competitive advantage over its competitors. In order to understand how information technology attains competitive advantage, managers should first understand information technology in details rather than just computers. Information technology also includes such aspects as factory automation, data recognition equipment, communications technologies among many other aspects (Porter, 2001).Porter as an author has clearly analyzed the role of information technology in competitive advantage. He is the great author of the Competitive Advantage which analyzes how organizations change their strategies based on the strategies used by their competitors in relation to information technology. This goes a long way in increasing understanding of information technology and how it relates to the management function. From the arguments that he brings on the table it clearly show that the research studies did on the article is strong and can be applied in any given organization and day to day life. The revolution of information technology is slowly sweeping over most economies and companies are forced to embrace the aspect so that they succeed in their functions. No company can be able to escape the effects of this revolution in the world. The information revolution has brought forth positive effects as well as negative effects Porter (2001), This revolution has helped in the reduction of costs for obtaining, processing and transmitting information within and without an organization. This has led to a change in how organizations carry out their business. In other words, information technology revolution has improved the efficiency of carrying out business. Managers of most organizations are aware of this revolution and they acknowledge its importance to their operations. The information revolution affects computation in various ways. One such way is that it changes the structure of the industry and in return, this alters the rules of competition. Technology alters industry structures because each industry aims at making it structure up to date depending on the technology in use. This in turn alters the competition because competitors also change their structure with an aim of ensuring they compete favorably with its rivals. That way, new technology, tends to change the nature through which competition takes place. The role of information technology is analyzed through the concept of the value chain (Saiz-álvarez, 2013). From the article, it’s clear to note that another effect of information technology in relation to organizations is that it has increased sales and efficiency through which they carry out their business. Technology has made it easy for businesses to operate by reducing on time and cost. Time used to order is shorter when using information technology because this can be done online in few minutes. All sectors in the economy can testify that information technology has impacted positively. This is because each organization is seeking to have the competitive advantage over its rivals and in the consumers are the beneficiaries of that (Mohamed, 2012). In reference to Porters article, it’s evident that the technology is paramount in every business and more especially in banks. Taken positively and utilized maximally, technology can improve the lives of people and at the same time promote growth and productivity of the business. The action of banks to exploit the available information through the internet has not only provided a platform for growth, but also it has provided avenues to create sufficient customer relations and satisfaction. The usage of the above named products like virtual accounts, PayPal money bookers, have not only alleviated the standard of banks but also they have helped the customers to get specialized services. Therefore, application and usage of such knowledge will ultimately lead to development and growth of the banks and other relevant business. Effects of the internet in the Australian banking sector Research postulates that internet banking has made everything easier and it involves just a click of a button and everything is achieved. For instance, shopping, payments and the crucial transactions are made online hence reducing the human resource that would be involved in the entire process. Furthermore, the banking sector in Australia has fully embraced the use of Internet in its operations and it has contributed to atomization of the operations. Report by a well known researcher affirms that most people will lose their jobs due to the ultimate use of Internet in the banking industry. This is because people can now do all the banking procedures and transactions online without having to physically visit banks. This includes checking their bank statements and balance online. Clients just need to login into their bank accounts then get all the services they need online (Albert & Lebrasseur, 2007). The use of internet has become common to people in Australia such that most businesses take place online. This also includes the shopping online for household goods as well as buying property online. Internet is creating convenience on how people carry out their bank transactions. For online bank transactions, the customer is sure to carry out the transactions in the shortest time possible as well as getting quality services without delay. The good thing about online banking is that customers are able to carry out any transaction at the comfort of their homes. Thus, it is convenient for bank customers. Online banking is cost-effective and the bank uses less money to maintain the system compared to situations where they have employed people. When the bank employs people, they have to make sure that they are under the pension scheme, and pensionable. Moreover, some other key provisions to the employees make the entire process expensive. For instance, employing cashiers in the bank is much more expensive compared to a situation where the whole thing is under automation (Coupey, 2001).Therefore, the internet banking is cheaper and it makes it possible for the bank to make more profits. Moreover, internet banking is swift and secure. One can make withdrawals just at the comfort living room and make payments to various places. Such convenience makes it easy in the long run and many customers prefer it to other manual systems. Through the online banking system, it is easier for an individual to make payments to hundreds of places which have adopted the online banking system at a more convenient pace compared to the manual system where one would go dropping cheques and deposits to the relevant banks. Therefore, such changes are paramount in the industry and they have simplified the workload which is associated with the banking industry. Moreover, in cases of shopping, the clients do not need to carry the money on their bags; they can easily do the shopping through online system. MasterCard’s are used in making purchases and payments and this makes it possible for the transactions to be more simplified compared to situations where the cash is used. Moreover, transactions which are carried through the internet are much faster compared to those which are done manually. For instance, when you are conducting a loan application online, the transaction is instant and it tells you whether one is valid to carry out such a transaction. The notification and update are enhanced through well spelt out bank statement which show whether one is valid for loan application. The fast nature of the transaction makes the online banking system to be more popular and more clients have started banking with such institutions (Coupey, 2001). Internet banking allows one to access credit faster than in the past. Initially, when one wanted to obtain credit, certain protocols were observed and it was entirely based on the papers. However, with increased cases in computer technology, the application, payment and the entire process has been made easier and, therefore, clients have started applying the credits and loans more often hence contributing to the growth of the bank. Many financial institutions in the past have applied the same tactics to attract clients who are far away hence making it easy for them to make profits. It’s only through well spelt out programs that banks will be in a position to hit the market demand and at same time satisfy the clients. Customers will go for those banks which can easily grant them credit and at a faster pace (Vuk, D., & Senegačnik, 1997).). Many entrepreneurs have embraced internet banking and they have attached their accounting software with bank accounts of the respective businesses. This has contributed to the formation of more accurate and authentic documents which can help the business acquire loans from the bank. Therefore, online banking has improved the formulation of statements and the same time enhancing the quick loan application and reimbursement. However, despite the fact that it comes with such advantages, it also has some challenges to the banking sector. For instance, the use of internet is expected to cause joblessness for bankers in Australia. For instance, the machines do most of the activities that are carried out in the banks and this explains why the employment may disappear in the long run. Initially, Human capital was crucial in the industry but with time it has continued to lose meaning. There are many banks in Australia, and if most of those banks adopt the online banking system, that translates to reduced human labor. Many of the employees in those banks will be forced to be retrenched hence creating more challenges in the country. The number of employees who in the banks are estimated to be thousands and the application of the online system means that all these employees will be faced out in the long run (Mohamed, 2012). Moreover, online banking is prone to scam and theft. There are many cases which are reported in Australia concerning online theft. For instance, people hacking the bank website and later on stealing millions of dollars and finally resulting to loss on the side of the banks. Such cases have been rampant especially in Australia and several banks have reported having gone through hell. Moreover, customers have complained a lot due to various scams which have been involved with online banking. Some clients are conned especially when they give the passwords of their credit cards to strangers (Fund, 2012). The above discussed factors have heavily contributed to different decisions and more also by intuitions. For instance, some institutions have viewed the internet as an entirely productive service while others has viewed as a hindrance of business. The experiences with organizations have resulted t different attitudes, but Potter (2001) asserts that the internet should be viewed in the right mind for the betterment of the client and the organization. The internet helps companies to exploit opportunities which are lucrative. For instance, it’s only through the internet that banks can develop retailing banking in the different parts of the country. The auto branches which are used by people today usually relies on the internet hence proving its importance when it comes diversifying the business. Moreover, there are many cases where the decisions of the business are solely dependent on the internet. For instance, the internet has enhanced the development of the Master cards which depend on internet connection for them to perform. Through the MasterCard’s, the businesses have managed to make huge profits which have promoted the banking sector in the long run. Most of the banks have taken technology positively and they have utilized it for their betterment and profit in the long run (Mohamed, 2012). For example, the banks have embarked on virtual money transfer through encouraging the usage of wire transfer, PayPal money bookers and Payoneer. Such agents have been useful in creating business. Many international merchants use wire transfer and PayPal which relies heavily on the internet in making transactions (Fund, 2012).For instance, for wire transfer to take place, a lot of knowledge on internet technology is paramount to ensure clarity and efficiency in the long run. Banks have taken advantage of the opportunity and they are using the internet enabled wire transfer for the betterment of the company and at the same time ensuring that the clients are satisfied with the services offered. Clients who use this international money transfer and especially those who are abroad have contributed to the growth of the business (Fund, 2012). Virtual accounts which are readily available in Australian banks such as common wealth bank have led to the expansion of the banks due to increased customer base. The expansion of the banks is not in the office space, but the website capacity to perform various tasks at the command. For instance, the common wealth Australian bank has managed to expand the website to the extent that a client can easily open a virtual account and operate it in absentia of a banker. Virtual accounts have helped the clients to get services at the click of a button and the mother bank finally gets all the profits. Many clients have managed to open such accounts and at the same time operate online. Using the virtual account one can deposits and withdrawals without accessing the cashier since the whole thing is automated. Moreover, the client can apply for a loan online and as well pay online. Such conveniences make the client feel satisfied and in the long run retain the bank. On the hand, an increase in customer base means an increase in profits and, therefore, developing the bank ultimately (Fund, 2012). The banks have also partnered with government and private agents whereby one can use specific master cards to access medical treatment in hospitals. For instance, Common Wealth bank clients have credit cards which can be used to pay for services in hospitals and other service rendering businesses. Using the credit card, one can be treated in the hospital easily and this satisfies the client. If the customer is satisfied then the bank will ultimately make a profit because the customer must be retained. Financial education and services are another venture that banks have embarked on. Many citizens of Australia need financial education and if the bank provides such services, it will attract many clients. The banks have adopted the strategy whereby they publish financial advice and other services related to financing to attract more clients. Through the strategy, they have managed to entice many customers who turned to be good and profitable to the bank. Common wealth bank has turned out to be the best in these devices and it has benefited in a great extent, as a result (Williams, 2007). References Albert, S., & Lebrasseur, R. (2007). Collaboration Challenges in Community Telecommunication Networks. International Journal of Technology and Human Interaction. 3, 13-33. Fund, I. M. (2012). Australia. Washington: International Monetary Fund. Coupey, E. (2001).Marketing and the internet. Upper Saddle River, NJ, Prentice Hall. Porter, M. E., (2001) "Strategy and the Internet," Harvard Business Review, Vol. 79, No.3 Vuk, D., & Senegacinik, M. (1997).The role of environmental management.Strategic Management and Its Support by Information Systems. 157-16 Mohamed, M. A. (2012).The Role of Information Technology in the Advancement of Multinational Corporations’ Intellectual Capital. International Journal of Productivity Management and Assessment Technologies (IJPMAT). 1, 1-17. Saiz-álvarez, J. M. (2013).Entrepreneurship, Information Technologies, and Educational-Based Virtuous Circles in Post-Industrialized Economies. Amazon Publishers. Williams, D. (2007). Pro PayPal E-Commerce. Amazon publishers New York City. Read More